Various governments around the world are currently proposing all types of spending cuts.
The reasons for this, is to address growing national debts that are spiraling out of control.
However this debt should not be compared to the debt of a normal person, as countries are known to run budget deficits and they are part and parcel of economic history.
Governments around the world have significantly increased their amount of borrowing in the last few years to bailout banks that had got themselves into trouble.
This has led to increased levels in the national debt and consequently, interest payments.
For these reasons, governments are proposing serious austerity cuts to various organisations and services in order to reduce government spending and save money.
National debt is created when a government chooses to borrow money.
They do this through issuing government bonds, securities and bills, and anyone can choose to purchase these and thus earn interest from lending to the government in question.
Governments are known to have deficits and a national debt, as long as they are able to finance the deficit by paying off the annual interest payments.
However, when the interest payments become too high for a government to pay off, they risk the chance of defaulting on the debt.
This is when a country may ask for help from other countries to avoid bankruptcy.
Recently this has become the case for Greece and Ireland, where other countries have had to step in and loan money to them to avoid bankruptcy.
Other countries are trying to preempt this situation through lowering government spending.
Another reason for proposing spending cuts is to address the balance between the private sector and the public sector.
In some places such as the UK, more people are employed in the public sector than the private sector.
This would appear to be a situation that needs to be addressed for the following reason.
For every public sector job, the government has to pay the salary of the individual, receiving only the tax in return, thus making a loss.
Whereas for a private sector job, the government makes a profit as it does not have to pay the salary and still receives tax.
Therefore it could be seen to be important for a country to have more private sector jobs than public sector jobs.
However, depending on the service being provided, profits can still be made from running an efficient service, with some countries effectively nationalising housing and airlines.
People also argue that there are some services that the country should always provide such as policing and health care.
This is because people believe private companies will be more focused on making profits than providing the service that is needed.
Whether the spending cuts will have the necessary effect on the national debt of a country is open to debate with some debts reaching the trillion mark.
However this seems to be the route that many governments are taking and only time will tell whether they have made the correct choice.